Aggressive Siebel Systems Not Budging Investors

Updated from 3:53 p.m. EDT

Struggling Siebel Systems(SEBL Quote - Cramer on SEBL - Stock Picks), widely seen as a possible takeover target, will make strategic acquisitions, cut costs and move aggressively into new markets, said newly appointed CEO George Shaheen at the company's financial analyst day on Thursday.

"We're going to position this company for growth," he said. "We will invest in products and services our customers want and need, make strategic acquisitions, and maintain and put together a balance sheet that displays our strength."

But Shaheen and other top executives indicated that a substantial share buyback, which could be a cure for the company's underperforming stock and mollify angry shareholders, will probably not be in the cards for the immediate future. Instead, said CFO Ken Goldman, the company will maintain its $2.2 billion horde of cash to use for potential acquisitions and to demonstrate to customers that the company is solid and too strong to fold and leave them in the lurch.

That answer angered institutional shareholders, who later peppered management with a series of increasingly hostile questions over the need for such a large cash holding. Many of those questions went unanswered.

Shaheen, who took over in April following the ousting of previous Siebel CEO Mike Lawrie, did not give details about any acquisition plans the company might have, which is especially ironic given that Siebel's stock has been heavily traded recently as rumors about a buyout by Oracle(ORCL Quote - Cramer on ORCL - Stock Picks) and then by Carl Icahn swirled around the company.

Management has consistently refused to comment on takeover rumors, but on Thursday Siebel filed a document with the Securities and Exchange Commission, which noted both the takeover talk as well as the routine nature of considering various business options. "We believe that the unusual intensity [of takeover rumors] in this instance and the heavy trading volume of our stock over the past several days warrants clarification," the filing said.

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